No 1098-T issued due to Grant exceeded Students cost?

[AZ-Tax]

New client. TP tells me No 1098-T issued due to Grant student/TP received exceeded Students cost for books, tuition etc. If my memory serves me correctly, I recall seeing some 1098-T with grants so I Googled a 1098-T for 2014 and unless it changed from 2013, box 5 has "Scholarships or Grants".

[S T]

I believe that would be correct - I have one - no payments,but Grants received. I can not believe how many of my parents or "students" just conveniently "misplace" their paperwork that has been sent

See if you can obtain access online with their user name and password

There are debits and credits - I have been dealing with this for 3 weeks on one of my clients dependent!

What a struggle it has been and I certainly am not being compensated, but the alternative is the student would go rush to the "local tax prep office " get done quick to get their "pitance" of a refund on W-2 and jeopardize the parents return for the college credits (if any) and/or claiming the "student" as a dependent.

I finally just said if no paperwork and no receipts - all taxable and advise the parents they would lose "student" as a dependent - that made everyone change their mind and finally obtain some of the paperwork

Good Luck!

Sandy

[AZ-Tax]

Can any Education credits be claimed with Grant?

The student/taxpayer (her) told me the college the she attended told the her, she will not be receiving a form 1098-T due to her Grant covered all her student tuition, books etc. seems to me the TP/student cannot claim any Education credits otherwise that would be double dipping. Just thinking out loud.

[AZ-Tax]

ST, how do you know......................

I finally just said if no paperwork and no receipts - all taxable and advise the parents they would lose "student" as a dependent - that made everyone change their mind and finally obtain some of the paperworkSandy

ST, w/o 1098-T, how do you know the Grant amount? When you say taxable, are you referring to the excess Grant money?

[FEDUKE404]

A pox on Form 1098-T !!

I'm beginning to think no one knows the Form 1098-T rules.

So far as I know, the document was never intended to show a "net" payment scenario. Most important is to report the qualified expenses (and always "billed" of course ) and then the amounts of scholarships, whatever amount was received, that may or may not be taxable. As for the income tax consequences. . .that's what our clients pay US for!

The most frequent occurrence I've seen is where the "scholarship" amount does not show up until the next calendar year, often after graduation. In the prior year, there was a Form 1098-T (dare I say "billed" again?), the taxpayer took everything for credit considerations (WHAT offset?!?!), and then gets a strange document later. Call 1-800-TAXPROS!

What a bleeping mess. As for preparing an accurate tax return, the ONLY solution is to follow the money (in/out) via reliable student account (what/when paid) info from the bursar.

FE

[RitaB]

This one bothers me

New client. TP tells me No 1098-T issued due to Grant student/TP received exceeded Students cost for books, tuition etc. If my memory serves me correctly, I recall seeing some 1098-T with grants so I Googled a 1098-T for 2014 and unless it changed from 2013, box 5 has "Scholarships or Grants".

http://www.irs.gov/pub/irs-pdf/i1098et.pdf

On page 2, there are the exceptions to preparing this worthless form. I got a sneaking suspicion there is a lot of excess scholarship / grant income going unreported on tax returns, and I don't see any reason why Form 1098-T isn't required to be prepared for these recipients. Plus they are the reason tuition is so high, and I have two kids in college, so I'm a little aggravated at the cash flow here.

[Burke]

The student/taxpayer (her) told me the college the she attended told the her, she will not be receiving a form 1098-T due to her Grant covered all her student tuition, books etc. seems to me the TP/student cannot claim any Education credits otherwise that would be double dipping. Just thinking out loud.

Basically, you are correct. Qualifed tuition, etc completely covered by a grant would not also be deductible on the tax return. However, there is always the situation whereby the grant exceeds these amounts, and some might be taxable. Without a transcript, you don't know. Forget the 1098-T. Have the student go online and print out her student account info. That will tell you.

[Steve Stang]

Same Problem with 1098 Scholarships Exceeding Expenses

Basically, you are correct. Qualifed tuition, etc completely covered by a grant would not also be deductible on the tax return. However, there is always the situation whereby the grant exceeds these amounts, and some might be taxable. Without a transcript, you don't know. Forget the 1098-T. Have the student go online and print out her student account info. That will tell you.

I've had to deal with this again this year as well. In this case the Box 1 was blank but the Box 2 had amounts billed. This amount was less than the scholarships/grants. I did request the bursar records and followed the money - a pain BTW - and could not find anything to make up the difference. Unlike in prior years this year the form did not check off Box 7 (billed over two calendar years).

My resolution: No AOC and the difference added to income on Line 7. I felt that - unlike in past years where she had expenses billed higher than scholarships - there was no way I was going to give her AOC as a 'double-dip.'

[Possi]

You know it...

No doubt there is a lot of income not being reported!

I get a lot of GI Bill money in Scholarships and Grants. If it is GI Bill, the excess is not taxable. So, ask!

[S T]

Mine was a Pell Grant that is taxable if not used for tution, books and supplies.
I had to retrieve statements online which were very minimal, then also obtained a list from the t/p for expenditures to minimize taxable. T/p acknowledged that he received FUNDS as overage to use for whatever purpose.

Sandy